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Targeted Attack

The U.S. Department of Defense aims to use RFID to eliminate waste, improve services and bolster security in its complex supply chain. The DOD's successes so far have convinced allies and some defense contractors to follow suit.

Jun 01, 2009—For the past 15 years, the U.S. Department of Defense (DOD) has been fighting a war to root out inefficiencies in its supply chain, the largest and most complex in the world. The goal: to make sure troops around the world have the correct arms, medicines, food and clothing when needed, by eliminating waste, improving services and bolstering security. The weapons of choice in this war against inefficiencies: active and passive radio frequency identification technologies.

After the Gulf War in Iraq in the early 1990s, the DOD developed an active RFID-based cargo tracking system—called the RF In-Transit Visibility (RF-ITV) network—to remedy logistics problems; the vast majority of some 40,000 containers shipped overseas had to be opened to determine what was inside, and many held redundant supplies. The RF-ITV now has nodes in more than 40 countries and 4,000 locations, and tracks an average of 35,000 supply shipments per day around the world. In hindsight, the U.S. General Accounting Office (now the Government Accountability Office) estimated that the RF-ITV system would have saved about $2 billion worth of inefficiencies during the Gulf War.

The DOD has pushed for international RFID standards and has been an influence on other governments and organizations. Australia, Poland, Spain, the United Kingdom and NATO are among the international forces that have been deploying the RF-ITV system over the past few years for real-time visibility of national and multinational shipments.

On another front, more than 4,000 DOD suppliers are attaching passive RFID tags to pallets of goods, so they can be automatically received into inventory, easily located in warehouses, and more accurately tracked during shipment to military bases or conflicts overseas. The DOD's requirement for its suppliers to use passive RFID tags on each pallet they ship to depots operated by the Defense Logistics Agency (DLA), the DOD's logistics arm, has convinced some of those suppliers to internalize the use of RFID—and to ask some of their own suppliers to RFID-tag their shipments.

The DOD is now aiming RFID at inefficiencies in services and vulnerabilities in security. For example, the U.S. military is RFID-tracking aircraft parts to shorten turnaround times for repair and maintenance, reducing costs and better serving pilots in the field. In addition, often paired with GPS and/or sensor technology, RFID is being employed to tamper-proof weapons and sensitive shipments sent to troops in far-flung locales, such as Afghanistan or Iraq.

The DOD has budgeted approximately $877.6 million for automatic identification technology from fiscal years 2010 to 2015, according to Alan Estevez, the department's principal assistant deputy undersecretary of defense, who has been the point person on RFID. The majority of the budget is for sustaining the RF-ITV system.

"At the end of the day, the government, and particularly the defense wing of the government, remains a key driver in terms of RFID adoption," says Michael Liard, RFID practice director at ABI Research. "If you look at the military's role in RFID historically, I expect that positive trend to continue in the foreseeable future. The interesting thing about government is that, in tough economic times, usually those budgets have been already allocated. In private business, they can elect at any time to back away or re-prioritize."

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